Michigan has entered the race to establish a cryptocurrency reserve with the introduction of House Bill 4087. The bill, sponsored by Representatives Bryan Posthumus and Ron Robinson, seeks to authorize the state treasurer to invest up to 10% of both the general fund and the economic stabilization fund in digital assets. If enacted, Michigan would join a growing list of states positioning themselves for deeper integration of cryptocurrency into government financial management.
The bill outlines specific conditions under which the state treasurer may hold and manage cryptocurrency assets. Section 351a mandates that any digital asset investments be secured using either a “secure custody solution,” a “qualified custodian,” or an “exchange-traded product” from a registered investment company. These provisions are intended to mitigate financial risks and ensure state funds remain under stringent security measures.
Furthermore, House Bill 4087 introduces the possibility of crypto lending. It specifies that the state may loan digital assets “without increasing the financial risk to this state,” provided that such transactions align with regulations set forth by the state treasurer. The measure reflects broader efforts nationwide to incorporate cryptocurrency into state-level financial planning while managing volatility concerns.
The legislation also addresses the use of cryptocurrency for state tax payments. According to the bill, any taxes or fees paid in cryptocurrency must be transferred to the general fund. If such payments were designated for other funds, the state treasurer is required to reimburse them in fiat currency. This mechanism aims to simplify the state’s financial operations while accommodating digital asset transactions.
Michigan’s Crypto Strategy and Broader Trends
Posthumus, a proponent of digital asset adoption, has been vocal about positioning Michigan at the forefront of the cryptocurrency sector. “Michigan has led in industries in the past. We led in manufacturing. We led during the Industrial Revolution with the automobile and office furniture manufacturing. For the last decade, two decades, we haven’t been leading,” he stated. “This is our opportunity to lead again and lead into the future.”
Beyond investment, Posthumus has proposed additional measures aimed at integrating digital assets into Michigan’s economy. These include expanding Bitcoin mining operations at industrially zoned properties and the creation of a state-branded cryptocurrency backed by gold and silver. While these proposals are separate from House Bill 4087, they indicate broader ambitions for cryptocurrency’s role in the state’s financial infrastructure.
Michigan’s move follows similar initiatives in other states. Texas, for instance, recently introduced a comparable bill in its Senate, led by Senator Charles Schwertner. Posthumus has expressed support for aligning Michigan’s policy with Texas, stating that Michigan should “join Texas in leading on crypto policy.”
The bill also comes on the heels of Michigan’s growing investment in digital asset markets. The State of Michigan Retirement System has made significant forays into crypto-linked financial products, including a $10 million investment in Grayscale’s spot Ethereum ETF in November and a $6.6 million allocation to ARK 21Shares’ Bitcoin ETF in July.
As Michigan considers House Bill 4087, it joins 19 other U.S. states that are exploring the creation of cryptocurrency reserves. While the legislation marks a significant step, its ultimate impact will depend on legislative approval and the evolving regulatory landscape surrounding digital assets.
